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- Has COVID-19 Impacted the Selection of Dubai Real Estate?
The Coronavirus pandemic significantly impacted the UAE economy and the Dubai real estate market. The UAE faced economic contractions due to decreased global trade and lower oil prices. The tourism and hospitality sectors, which are vital to the UAE's economy, experienced severe declines due to travel restrictions, resulting in substantial revenue losses.
How did the introduction and removal of COVID restrictions affect housing prices? Post-lockdown, the Dubai property market has undergone several changes, with certain areas now gaining popularity. This article will discuss a detailed overview of the effects and the subsequent changes of the real estate market in Dubai.
Content:
- The influence of COVID-19 on real estate sales in 2020
- What comes next for the Dubai real estate market?
- Popular areas in Dubai
The Influence of COVID-19 on Real Estate Sales in 2020
At the initial stage of the pandemic, real estate sales in Dubai remained high, and many investors purchased housing units remotely. However, COVID-19 still had significant consequences for the city as Dubai was put under quarantine with restrictions. During this time, property sales and prices dropped considerably.
From January to June 2020, the Dubai Land Department (DLD) registered 15,897 sales transactions totaling AED 32.5 billion ($8.85 billion). The average real estate price decreased by 4% compared to the first half of 2019. A side-by-side comparison showed a decline in housing costs in areas such as Dubailand, where prices dropped by 2% per square meter, from AED 1,277 ($347) in the second half of 2019 to AED 1,252 ($340) in the first half of 2020.
In Dubai Marina, studio prices fell from AED 694,000 ($189,000) to AED 648,000 ($176,500). For one-bedroom apartments, they declined from AED 1.11 million ($302,000) to AED 1.6 million ($435,500). Additionally, real estate in Jumeirah Village Circle, Jumeirah Lake Towers, Business Bay, Dubai Silicon Oasis, and Jumeirah Beach Residence fell in price by 6% during the quarantine period.
The market began to recover after the gradual lifting of restrictions in June 2020. This recovery was facilitated by online tours and remote purchasing options by many real estate agencies and construction companies, which were available even before the borders were closed.
By 2021, a record-setting 84,196 real estate purchase and sale transactions were concluded in the emirate, worth a total of almost AED 300 billion ($81.6 billion). This shows that the average house price increased by 9.2% in Dubai.
What Comes Next for the Dubai Real Estate Market?
Increased consumer interest in villas can be considered another effect of the pandemic. As a result, their prices also increased in 2021. Here is an example indicating how the Coronavirus has affected housing selection in Dubai.
In Arabian Ranches, the price per square meter is currently AED 987 ($268), compared to AED 880 ($239) last year. A four-bedroom villa here will cost AED 3.65 million ($ 994,000), up from AED 3.57 million ($972,000) in 2020. Five-bedroom homes also increased in price, from AED 4.44 million ($1.2 million) to AED 4.58 million ($1.24 million).
Villas in the following areas are also in great demand:
- Springs
- Jumeirah Park
- The Villa
- Dubailand
- Damac Hills
- Dubai Hills Estate
Popular Areas in Dubai
According to the Dubai Land Department, buyers are more interested in the following neighborhoods:
- Dubai Marina
- Arabian Ranches
- Palm Jumeirah
The new complexes, such as Dubai Hills Estate and Damac Hills, are located near the major highways of the city, making them highly sought after among buyers. The Albizia project in Akoya Oxygen has also seen high interest, offering land plots, cottages, and townhouses for sale. You can own a villa here for AED 760,000 ($207,000).
Another popular location is the Rukan residential complex in Dubailand, ideal for those who prefer a quieter, more relaxed lifestyle away from the hustle and bustle of the metropolis.
For those interested in off-plan projects, Jumeirah Village Circle, Downtown Dubai, Palm Jumeirah, and Business Bay are notable areas. These locations feature luxury real estate currently under construction or soon to be completed. Property developers are often willing to negotiate flexible payment plans, which can be discussed during the negotiation process.
Off-plan cottages are available in communities, such as Golf Place in Dubai Hills Estates and Sobha Hartland in Mohammed Bin Rashid City. In addition, facilities close to the Expo 2020 venue, including Emaar South in Dubai South, are already in use.